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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 5/07/20 Triple-S Management Corp 8-K:2,9 5/07/20 11:567K Broadridge Fin’l So… Inc |
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Triple-S Management Corporation
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1441 F.D. Roosevelt Ave.
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AT THE COMPANY:
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INVESTOR RELATIONS:
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Juan José Román-Jiménez
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Mr. Garrett Edson
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EVP and Chief Financial Officer
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ICR
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(787) 749-4949
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(787) 792-6488
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- |
Physicians, psychologists and other providers within its network can now use voice and video calls to replace office visits where appropriate, reducing exposure to the virus. Lab
test orders can be sent via e-mail and drug prescriptions via e-prescribing.
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- |
The Company has expanded access to its 24/7 nurse triage and advice service, TeleConsulta, to assist people who may not require emergency care or can self-care at home.
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- |
The Company has also expanded the availability of its telehealth platform, TeleConsulta MD, which allows members to make virtual medical consultations with primary care physicians
via smartphone, tablet or computer.
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- |
The Company has recently implemented a prescription drug home delivery service.
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- |
Triple-S Foundation committed an initial $250,000 donation to various organizations addressing food insecurity, including funds to bolster small farmers, provide food for the
homeless, the general population through Puerto Rico’s Food Bank, and an NGO serving the elderly in rural communities.
|
- |
As of March 31, 2020, the Company has cash and cash equivalents of $104.6 million, including $9.0 million at the parent company level. Triple-S’s investment portfolio stood at
$1.7 billion as of March 31, of which 76% where investment-grade fixed income securities. The Company also believes it would be able to access additional debt, if necessary, to further reinforce its liquidity. In sum, the Company believes
it is well capitalized to support the fundamental operations of its business throughout the pandemic and beyond.
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• |
Following a $45 million net of tax impact of net unrealized losses on equity investments after the significant decrease in equity markets this quarter, the Company reported a net
loss of $26.1 million, or $1.12 per share, versus net income of $34.8 million, or $1.52 per diluted share, in the prior-year period;
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• |
Adjusted net income of $17.7 million, or $0.75 per diluted share, versus adjusted net income of $17.7 million, or $0.77 per diluted share, in the prior-year period;
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• |
Operating revenues of $896.4 million, a 13.8% increase from the prior-year period, primarily reflecting higher Managed Care net premiums earned;
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• |
Consolidated loss ratio of 81.6%, a 50 basis point increase versus the first quarter of 2019;
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• |
Medical loss ratio (“MLR”) increased 10 basis points to 83.7%;
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• |
Consolidated operating income was $19.7 million, compared to consolidated operating income of $31.7 million in the prior-year period;
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• |
Under the Company’s share repurchase program, during the first quarter of 2020, the Company repurchased 577,447 shares at an aggregate cost of approximately $9.0 million. As of
May 6, 2020, $2.5 million remained available under the program.
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• |
Consolidated net premiums earned were $875.9 million, up 14.0% from the prior-year period, primarily reflecting an increase in membership and higher average premium rates within
the Managed Care segment.
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• |
Consolidated claims incurred were $714.5 million, up 14.7% year-over-year. Consolidated loss ratio of 81.6% rose 50 basis points from the prior-year period, mostly reflecting $5
million of estimated earthquake losses recorded by the Property and Casualty segment and increased benefits in the Company’s 2020 Medicare product offering, partially offset by lower Managed Care utilization of services during the last two
weeks of the quarter as the result of the government-enforced lockdown related to the COVID-19 pandemic.
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• |
Consolidated operating expenses of $162.2 million increased by $29.5 million, or 22.2%, from the prior-year period, primarily resulting from reinstatement of the HIP fee in 2020. The consolidated operating expense ratio was 18.5%, a 130 basis point increase from the prior-year quarter.
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• |
Managed Care premiums earned were $809.8 million, up 14.8% year-over-year.
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o |
Medicare premiums earned of $387.8 million increased 16.6% from the prior-year period, largely due to an increase of approximately 24,000 member months, primarily reflecting a more
competitive product offering, higher average premium rates, and an increase in the average membership risk score.
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o |
Commercial premiums earned of $201.1 million increased 1.3% from the prior-year period, mainly reflecting
an increase in fully insured enrollment during the quarter of approximately 25,000 member months.
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o |
Medicaid premiums earned of $220.9 million increased 26.7% from the prior-year period, primarily reflecting higher membership of approximately 38,000 member months during the
quarter, higher average premium rates, and the reinstatement of the HIP Fee pass-through in 2020.
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• |
Reported MLR of 83.7% was 10 basis points higher than the prior-year period, reflecting increased benefits in the Company’s 2020 Medicare product offering, partially offset by
lower Managed Care utilization of services during the last two weeks of the quarter as the result of the government-enforced lockdown related to the COVID-19 pandemic.
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• |
Triple-S Propiedad, Inc. (TSP), the Company’s P&C subsidiary, has paid a cumulative amount of $745 million in claims and expenses related to Hurricane María. Estimated gross
losses remain unchanged at $967 million.
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• |
TSP received 9 new claims, reopened 26 claims, and paid 28 claims during the first quarter of 2020. 652 claims remain open.
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• |
The Company has been served with process in 361 of the 652 claims that remain open.
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• |
As is the case for all claim liabilities, the gross losses related to Hurricane Maria are based on the Company’s best estimate of the ultimate expected cost of claims with the
information currently on hand and are subject to change.
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• |
Trends in health care costs and utilization rates
|
• |
Ability to secure sufficient premium rate increases
|
• |
Competitor pricing below market trends of increasing costs
|
• |
Re-estimates of policy and contract liabilities
|
• |
Changes in government laws and regulations of managed care, life insurance or property and casualty insurance
|
• |
Significant acquisitions or divestitures by major competitors
|
• |
Introduction and use of new prescription drugs and technologies
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• |
A downgrade in the Company’s financial strength ratings
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• |
Litigation or legislation targeted at managed care, life insurance or property and casualty insurance companies
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• |
Ability to contract with providers consistent with past practice
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• |
Ability to successfully implement the Company’s disease management, utilization management and Star ratings programs
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• |
Ability to maintain Federal Employees, Medicare and Medicaid contracts
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• |
Volatility in the securities markets and investment losses and defaults
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• |
General economic downturns, major disasters, and epidemics
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Condensed Consolidated Balance Sheets
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Exhibit I
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Condensed Consolidated Statements of Earnings
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Exhibit II
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Condensed Consolidated Statements of Cash Flows
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Exhibit III
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Segment Performance Supplemental Information
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Exhibit IV
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Reconciliation of Non-GAAP Financial Measures
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Exhibit V
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Assets
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||||||||
Investments
|
$
|
1,666,126
|
$
|
1,643,637
|
||||
Cash and cash equivalents
|
104,580
|
109,837
|
||||||
Premium and other receivables, net
|
644,984
|
567,692
|
||||||
Deferred policy acquisition costs and value of business acquired
|
237,171
|
234,885
|
||||||
Property and equipment, net
|
89,367
|
88,588
|
||||||
Other assets
|
245,966
|
174,187
|
||||||
Total assets
|
$
|
2,988,194
|
$
|
2,818,826
|
||||
Liabilities and Stockholders' Equity
|
||||||||
Policy liabilities and accruals
|
$
|
1,466,165
|
$
|
1,425,477
|
||||
Accounts payable and accrued liabilities
|
492,982
|
370,483
|
||||||
Short-term borrowings
|
78,000
|
54,000
|
||||||
Long-term borrowings
|
24,897
|
25,694
|
||||||
Total liabilities
|
2,062,044
|
1,875,654
|
||||||
Stockholders’ equity:
|
||||||||
Common stock
|
23,386
|
23,800
|
||||||
Other stockholders’ equity
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903,464
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920,065
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||||||
Total Triple-S Management Corporation stockholders’ equity
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926,850
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943,865
|
||||||
Non-controlling interest in consolidated subsidiary
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(700
|
)
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(693
|
)
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||||
Total stockholders’ equity
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926,150
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943,172
|
||||||
Total liabilities and stockholders’ equity
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$
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2,988,194
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$
|
2,818,826
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For the Three Months Ended
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||||||||
2019
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||||||||
Revenues:
|
||||||||
Premiums earned, net
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$
|
875,897
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$
|
768,002
|
||||
Administrative service fees
|
2,194
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2,632
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||||||
Net investment income
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14,311
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15,376
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||||||
Other operating revenues
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4,039
|
1,577
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||||||
Total operating revenues
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896,441
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787,587
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||||||
Net realized investment (losses) gains on sale of securities
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(466
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)
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1,315
|
|||||
Net unrealized investment (losses) gains on equity investments
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(56,806
|
)
|
19,669
|
|||||
Other income, net
|
3,605
|
1,169
|
||||||
Total revenues
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842,774
|
809,740
|
||||||
Benefits and expenses:
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||||||||
Claims incurred
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714,522
|
623,190
|
||||||
Operating expenses
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162,201
|
132,663
|
||||||
Total operating costs
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876,723
|
755,853
|
||||||
Interest expense
|
1,853
|
1,788
|
||||||
Total benefits and expenses
|
878,576
|
757,641
|
||||||
(Loss) income before taxes
|
(35,802
|
)
|
52,099
|
|||||
Income tax (benefit) expense
|
(9,650
|
)
|
17,316
|
|||||
Net (loss) income
|
(26,152
|
)
|
34,783
|
|||||
Net loss attributable to the non-controlling interest
|
7
|
3
|
||||||
Net (loss) income attributable to Triple-S Management Corporation
|
$
|
(26,145
|
)
|
$
|
34,786
|
|||
Earnings per share attributable to Triple-S Management Corporation:
|
||||||||
Basic net (loss) income per share
|
$
|
(1.12
|
)
|
$
|
1.53
|
|||
Diluted net (loss) income per share
|
$
|
(1.12
|
)
|
$
|
1.52
|
|||
Weighted average of common shares
|
23,381,949
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22,757,794
|
||||||
Diluted weighted average of common shares
|
23,381,949
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22,840,274
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For the three months ended
|
||||||||
2019
|
||||||||
Net cash provided by (used in) operating activities
|
$
|
6,518
|
$
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(69,900
|
)
|
|||
Cash flows from investing activities:
|
||||||||
Proceeds from investments sold or matured:
|
||||||||
Securities available for sale:
|
||||||||
Fixed maturities sold
|
43,425
|
164,997
|
||||||
Fixed maturities matured/called
|
11,099
|
12,267
|
||||||
Securities held to maturity - fixed maturities matured/called
|
81
|
1,154
|
||||||
Equity investments sold
|
21,107
|
23,123
|
||||||
Other invested assets sold
|
8,524
|
373
|
||||||
Acquisition of investments:
|
||||||||
Securities available for sale - fixed maturities
|
(42,822
|
)
|
(166,626
|
)
|
||||
Securities held to maturity - fixed maturities
|
(80
|
)
|
(539
|
)
|
||||
Equity investments
|
(102,733
|
)
|
(9,139
|
)
|
||||
Other invested assets
|
(10,438
|
)
|
(8,546
|
)
|
||||
Increase in other investments
|
(4,086
|
)
|
(535
|
)
|
||||
Net change in policy loans
|
(241
|
)
|
(309
|
)
|
||||
Net capital expenditures
|
(4,587
|
)
|
(2,968
|
)
|
||||
Capital contribution on equity method investees
|
(4,933
|
)
|
-
|
|||||
Net cash (used in) provided by investing activities
|
(85,684
|
)
|
13,252
|
|||||
Cash flows from financing activities:
|
||||||||
Change in outstanding checks in excess of bank balances
|
53,485
|
36,682
|
||||||
Net change in short-term borrowings
|
24,000
|
-
|
||||||
Repayments of long-term borrowings
|
(810
|
)
|
(808
|
)
|
||||
Repurchase and retirement of common stock
|
(8,989
|
)
|
(1
|
)
|
||||
Proceeds from policyholder deposits
|
10,296
|
3,607
|
||||||
Surrender of policyholder deposits
|
(4,073
|
)
|
(4,560
|
)
|
||||
Net cash provided by financing activities
|
73,909
|
34,920
|
||||||
|
||||||||
Net decrease in cash and cash equivalents
|
(5,257
|
)
|
(21,728
|
)
|
||||
Cash and cash equivalents, beginning of period
|
109,837
|
117,544
|
||||||
Cash and cash equivalents, end of period
|
$
|
104,580
|
$
|
95,816
|
(Unaudited)
|
Three months ended March 31,
|
|||||||||||
(dollar amounts in millions)
|
2020
|
2019
|
Percentage
Change
|
|||||||||
Premiums earned, net:
|
||||||||||||
Managed Care:
|
||||||||||||
Commercial
|
$
|
201.1
|
$
|
198.5
|
1.3
|
%
|
||||||
Medicare
|
387.8
|
332.7
|
16.6
|
%
|
||||||||
Medicaid
|
220.9
|
174.3
|
26.7
|
%
|
||||||||
Total Managed Care
|
809.8
|
705.5
|
14.8
|
%
|
||||||||
Life Insurance
|
46.7
|
44.2
|
5.7
|
%
|
||||||||
Property and Casualty
|
20.6
|
19.4
|
6.2
|
%
|
||||||||
Other
|
(1.2
|
)
|
(1.1
|
)
|
(9.1
|
%)
|
||||||
Consolidated premiums earned, net
|
$
|
875.9
|
$
|
768.0
|
14.0
|
%
|
||||||
Operating revenues: 1
|
||||||||||||
Managed Care
|
$
|
818.1
|
$
|
715.0
|
14.4
|
%
|
||||||
Life Insurance
|
53.6
|
50.8
|
5.5
|
%
|
||||||||
Property and Casualty
|
22.7
|
21.9
|
3.7
|
%
|
||||||||
Other
|
2.0
|
(0.1
|
)
|
100.0
|
%
|
|||||||
Consolidated operating revenues
|
$
|
896.4
|
$
|
787.6
|
13.8
|
%
|
||||||
Operating income (loss): 2
|
||||||||||||
Managed Care
|
$
|
14.2
|
$
|
22.1
|
(35.7
|
%)
|
||||||
Life Insurance
|
5.0
|
5.6
|
(10.7
|
%)
|
||||||||
Property and Casualty
|
(0.2
|
)
|
3.6
|
(105.6
|
%)
|
|||||||
Other
|
0.7
|
0.4
|
75.0
|
%
|
||||||||
Consolidated operating income
|
$
|
19.7
|
$
|
31.7
|
(37.9
|
%)
|
||||||
Operating margin: 3
|
||||||||||||
Managed Care
|
1.7
|
%
|
3.1
|
%
|
-140
|
bp
|
||||||
Life Insurance
|
9.3
|
%
|
11.0
|
%
|
-170
|
bp
|
||||||
Property and Casualty
|
(0.9
|
%)
|
16.4
|
%
|
-1,730
|
bp
|
||||||
Consolidated
|
2.2
|
%
|
4.0
|
%
|
-180
|
bp
|
||||||
Depreciation and amortization expense
|
$
|
3.9
|
$
|
3.5
|
11.4
|
%
|
Managed Care Additional Data
|
Three months ended
March 31,
|
|||||||
(Unaudited)
|
2020
|
2019
|
||||||
Member months enrollment:
|
||||||||
Commercial:
|
||||||||
Fully-insured
|
978,342
|
953,052
|
||||||
Self-insured
|
330,232
|
362,490
|
||||||
Total Commercial
|
1,308,574
|
1,315,542
|
||||||
Medicare Advantage
|
407,907
|
383,608
|
||||||
Medicaid
|
1,068,016
|
1,029,736
|
||||||
Total member months
|
2,784,497
|
2,728,886
|
||||||
Claim liabilities (in millions)
|
$
|
340.0
|
$
|
397.3
|
||||
Days claim payable
|
46
|
61
|
||||||
Premium PMPM:
|
||||||||
Managed Care
|
$
|
329.96
|
$
|
298.13
|
||||
Commercial
|
205.55
|
208.28
|
||||||
Medicare Advantage
|
950.71
|
867.29
|
||||||
Medicaid
|
206.83
|
169.27
|
||||||
Medical loss ratio:
|
83.7
|
%
|
83.6
|
%
|
||||
Commercial
|
78.4
|
%
|
82.9
|
%
|
||||
Medicare Advantage
|
82.7
|
%
|
80.6
|
%
|
||||
Medicaid
|
90.3
|
%
|
90.3
|
%
|
||||
Adjusted medical loss ratio: 1
|
84.1
|
%
|
85.5
|
%
|
||||
Commercial
|
78.4
|
%
|
83.1
|
%
|
||||
Medicare Advantage
|
81.3
|
%
|
79.4
|
%
|
||||
Medicaid
|
94.6
|
%
|
99.9
|
%
|
||||
Operating expense ratio:
|
||||||||
Consolidated
|
18.5
|
%
|
17.2
|
%
|
||||
Managed Care
|
15.5
|
%
|
14.5
|
%
|
Managed Care Membership by Segment
|
As of March 31,
|
|||||||
2019
|
||||||||
Members:
|
||||||||
Commercial:
|
||||||||
Fully-insured
|
325,253
|
318,523
|
||||||
Self-insured
|
109,760
|
118,677
|
||||||
Total Commercial
|
435,013
|
437,200
|
||||||
Medicare Advantage
|
135,710
|
128,090
|
||||||
Medicaid
|
355,512
|
355,694
|
||||||
Total members
|
926,235
|
920,984
|
Adjusted Net Income
|
||||||||
(Unaudited)
|
Three months ended
March 31,
|
|||||||
(dollar amounts in millions)
|
2020
|
2019
|
||||||
Net (loss) income
|
$
|
(26.1
|
)
|
$
|
34.8
|
|||
Less adjustments:
|
||||||||
Net realized investment (losses) gains, net of tax
|
(0.4
|
)
|
1.1
|
|||||
Unrealized (losses) gains on equity investments
|
(45.4
|
)
|
15.7
|
|||||
Private equity investment income, net of tax
|
2.0
|
0.3
|
||||||
Adjusted net income
|
$
|
17.7
|
$
|
17.7
|
||||
Diluted adjusted net income per share
|
$
|
0.75
|
$
|
0.77
|
This ‘8-K’ Filing | Date | Other Filings | ||
---|---|---|---|---|
5/21/20 | ||||
Filed on / For Period end: | 5/7/20 | 10-Q | ||
5/6/20 | ||||
3/31/20 | 10-Q | |||
12/31/19 | 10-K, 4 | |||
List all Filings |